Business OpportunitiesCore sectors grow 7.1% in August
In yet another sign of a revival in the economy, the index of six core industries clocked a significant 7.1 per cent increase in August, against the 2.1 per cent growth it recorded in the same month last year.
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In July, the core sector index had grown by 1.8 per cent, the lowest in the past five months, due to a high base effect.
The growth has been led by coal, petroleum refinery, electricity, cement and steel, whereas production of crude oil fell 2.6 per cent, against a 1 per cent decline in August 2008.
DK Joshi, principal economist at credit rating agency Crisil, said much could not be inferred from this sharp rise as the data keeps fluctuating every month. He, however, added the underlying trend was positive and the economy was recovering. “It could be partly because of the economic recovery and partly due to a slower growth last year. It will have some implication on the industrial output of August,” Joshi added.
The six core sectors, which have a combined weight of 26.7 per cent in the Index of Industrial Production (IIP), also have a reflection on IIP figures. But in July, the figures showed a mismatch with IIP figures showing 6.8 per cent growth despite a dismal 1.8 per cent increase in the core sector.
In August, petroleum refinery production registered 3 per cent growth, against a 2.5 per cent increase in the year-ago month. Coal production grew 12.9 per cent, compared with a 5.9 per cent rise in August last year. Electricity, cement and finished (carbon) steel recorded growth of 9.8 per cent, 17.6 per cent and 3.1 per cent, respectively.
During April-August this year, the six core industries registered 4.8 per cent growth, against a 3.3 per cent increase in the corresponding period last year.
Coal production grew by 12.4 per cent in the first five months of the current fiscal, compared to an increase of 7.3 per cent during the same period of 2008-09. Electricity generation, cement and steel production grew by 6.4 per cent, 13.5 per cent and 2.6 per cent, respectively, in April-August 2009-10.